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Dry Cargo Market ReportCargo Market Report
02 March 2007 - There was significant news from India this week following the country’s budget on Wednesday. First, there was news to abolish import duty on coking coal and coke imports (equivalent to USD 5.00 per tonne). Second there was the imposition of an export tax of USD 6.75 per tonne on shipments of iron ore leaving the country. For the latter the Indian steel producers have been actively lobbying for some time saying that the country’s indigenous ore should be used for domestic steel production. The removal of the coal/coke import duty will also benefit India’s steel producers.
In terms of shipping the impact could be to raise international demand for Metallurgical coal. Even the imposition of the export tax on iron ore could benefit shipping as we have outlined in our overview comments previously. This is because a significant proportion of India’s iron ore is destined for China. China, in turn, is not going to cut back on its overall imports simply because it cannot get all that it wants from India. Instead it will turn to other sources which will include Australia and, more importantly in this context, to Brazil.
With the far greater distance from Brazil to China, as compared to India to China, even if there is no increase in the volume of trade there will be a significant increase in shipping demand because of the greater distance.
In the meantime congestion in Australia continues to be a significant feature in the market. At the time of writing there were some 73 vessels in the queue. This led, in turn, to vessels turning to Indonesia for spot supplies only to find that because of heavy rains flooding had made this not always possible. That then led to Charterers trying to lift cargoes out of Richards Bay which itself is now suffering some congestion, according to reports.
Thus we have yet another classic example of fundamentals pointing the market in one direction (mainly downwards) whilst the real world events of supply reductions overrides the theoretical considerations and actually moves the market upwards. Cape rates from Cont/FE are effectively at USD 100,000 pd.
Panamax
The Atlantic continues to be extremely firm with prompt tonnage scarce. Period activity is still leading from the front. A similar situation is seen in the Pacific except the spot market has not yet achieved the momentum seen in the Atlantic.
The prompt tonnage in the Atlantic is disappearing very quickly and rates are rising rapidly. Period interest is still dominant with higher rates now being paid for short, medium and long period. The front haul rate has broken through the USD 40,000 barrier and moving towards USD 45,000 daily for a good LME type. Trans-Atlantic round voyages are now paying in excess of USD 40,000 daily. Charterers now have to cast their eyes on tonnage open in the Middle East to cover requirements from South America.
There is a definite lack of volume on spot fixing but this has not stopped the rates and indices from rising. Period fixing in the East has been at comparative levels to those in the Atlantic however the spot rates are languishing behind. It would seem that most Owners prefer short period above short trips and we are now seeing rates in the upper USD 30,000’s for 3-5 and 4-6 month fixtures. The Pacific round voyage index has now moved to USD 35,372 with a trip back to the Atlantic at USD 33,414.
The Indian market suffered a setback during this week when it was announced that there would be a considerable increase in export tax for iron ore cargoes with immediate effect. This caused concern and some early stems were cancelled or delayed. This may, however, not have too much of an adverse effect in the long term as tonnage in the Indian Ocean is now being sought after to cover Atlantic business.
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02 March 2007 - There was significant news from India this week following the country’s budget on Wednesday. First, there was news to abolish import duty on coking coal and coke imports (equivalent to USD 5.00 per tonne). Second there was the imposition of an export tax of USD 6.75 per tonne on shipments of iron ore leaving the country. For the latter the Indian steel producers have been actively lobbying for some time saying that the country’s indigenous ore should be used for domestic steel production. The removal of the coal/coke import duty will also benefit India’s steel producers.
In terms of shipping the impact could be to raise international demand for Metallurgical coal. Even the imposition of the export tax on iron ore could benefit shipping as we have outlined in our overview comments previously. This is because a significant proportion of India’s iron ore is destined for China. China, in turn, is not going to cut back on its overall imports simply because it cannot get all that it wants from India. Instead it will turn to other sources which will include Australia and, more importantly in this context, to Brazil.
With the far greater distance from Brazil to China, as compared to India to China, even if there is no increase in the volume of trade there will be a significant increase in shipping demand because of the greater distance.
In the meantime congestion in Australia continues to be a significant feature in the market. At the time of writing there were some 73 vessels in the queue. This led, in turn, to vessels turning to Indonesia for spot supplies only to find that because of heavy rains flooding had made this not always possible. That then led to Charterers trying to lift cargoes out of Richards Bay which itself is now suffering some congestion, according to reports.
Thus we have yet another classic example of fundamentals pointing the market in one direction (mainly downwards) whilst the real world events of supply reductions overrides the theoretical considerations and actually moves the market upwards. Cape rates from Cont/FE are effectively at USD 100,000 pd.
Panamax
The Atlantic continues to be extremely firm with prompt tonnage scarce. Period activity is still leading from the front. A similar situation is seen in the Pacific except the spot market has not yet achieved the momentum seen in the Atlantic.
The prompt tonnage in the Atlantic is disappearing very quickly and rates are rising rapidly. Period interest is still dominant with higher rates now being paid for short, medium and long period. The front haul rate has broken through the USD 40,000 barrier and moving towards USD 45,000 daily for a good LME type. Trans-Atlantic round voyages are now paying in excess of USD 40,000 daily. Charterers now have to cast their eyes on tonnage open in the Middle East to cover requirements from South America.
There is a definite lack of volume on spot fixing but this has not stopped the rates and indices from rising. Period fixing in the East has been at comparative levels to those in the Atlantic however the spot rates are languishing behind. It would seem that most Owners prefer short period above short trips and we are now seeing rates in the upper USD 30,000’s for 3-5 and 4-6 month fixtures. The Pacific round voyage index has now moved to USD 35,372 with a trip back to the Atlantic at USD 33,414.
The Indian market suffered a setback during this week when it was announced that there would be a considerable increase in export tax for iron ore cargoes with immediate effect. This caused concern and some early stems were cancelled or delayed. This may, however, not have too much of an adverse effect in the long term as tonnage in the Indian Ocean is now being sought after to cover Atlantic business.
推荐海运精英论坛www.ffachina.com/bbs
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